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Cold feet VS Quick feet buyers?

This week I bet I answered and made over 50 calls and guess what? Most of those calls were for one closing. The best part is, it was all for a great assignment fee… ready for this? $1500. The irony of it all is the other closing I have tomorrow is for a $4000 assignment fee and I only spent a few hours on it. It’s funny how the lower the assignment fee, the more the work required.

My seller is anxious to sell especially after my runaway buyer backed out on the day of closing when he found out the seller was not totally honest about taxes. I could have easily backed out of the deal, but I felt obligated to help the seller sell his house, so I tried to market to other buyers. The problem with the house is the taxes are high and a lot of my investor buyers love the house, but the numbers don’t work. I had to reduce the asking price so I could attract a buyer who is willing to overlook the high taxes and I finally found one through another new wholesaler. I took this wholesaler under my wings because he is new to the game and wants to close his first deal so bad.

Initially he added his $2K assignment fee and showed the house to a buyer who was excited about the house, but after the run around and several back and forth calls, he called 3 days later to say that the numbers are $5K more than he wants to pay for it. The wholesaler was disappointed and called me to tell me the “bad” new and in his own words “the deal has been crushed”. As far as I’m concerned a deal is not crushed until you exhaust all your options, so I told him if he says the asking price is $5K more than he wants to pay it means he wants to negotiate. So I told him to ask his buyer to meet us half way. His buyer agreed right away and sent a copy of the EMD within hours. I decided to share the assignment fee with him 50/50 for 2 reasons and that is he has been doing working hard trying to sell the house and also I really want him to get his first  wholesale check because he reminds me too much of me when I got started.

This leads me to a question that was asked on facebook a few days ago:

“need help FB FAM! How do you deal with investors that have cold feet when making a decision or take FOREVER doing their due diligence? any tips on how to make them come up with a offer or answer faster?? need help! The poster’s frustration was that he has a buyer who showed interest in the house, but is yet to call him back to make an offer.”

First of all always try to get good deals and by good deals, I mean deals that at least 80% of your buyers are looking for and avoid marginal, ok or soso deals that are harder to sell. It’s not really worth the time or the effort you put into it. It’s better to get one great house under contract that you know your buyers will compete for than 5 ok houses that might sell. Since it’s a buyer’s market right now, buyers are very picky and are only going for the slam dunks. If it’s a good deal and the price is right, you will know if a buyer is interested within hours of showing them the house.

Also you should deal mostly with “real” buyers or “quick feet” buyer. A lot of wholesalers pride themselves in having a huge buyer’s list of hundreds or even thousands of buyers, but only a handful are the “real” investors buying several houses every month. These “Real” buyers don’t have cold feet. They know exactly what they want and will jump at it as soon as they see it and it usually takes anywhere from a few minutes of seeing the house to a few hours. But they will usually call you to tell you yes or no and why because they are hoping to do more business from you in future.

Create competition. Everyone wants to be a winner and the competition spirit kicks in if we feel there is someone else that could potentially take the price. Let your buyer know that there are other buyers that are interested in the deal and as much as you would love to do business with him, you would like a response within a timeline (say 24 hours or 48 hours) or you would assume he is no more interested and sell to someone else.

Offer incentives and give him a reason to call you back.  We tend to keep in touch with people we know we can profit from now or in future. You could say something like, “if you are not interested in the house, that’s okay, just let me know what you think either way because I have other houses for sale you might be interested in”. Another reason for this statement is so that you have an opportunity to ask why he wasn’t interested in the house and you can get a hint of what to look for next time before getting a house under contract.

Don’t tie your house up with wanna be wholesalers. Give them an opportunity to market your house, but don’t sign a contract with them until they find a buyer with EMD. A good number of the houses I have sold have been through other wholesalers and it’s a great way to sell houses especially if you are new in the game, but don’t be too certain as to put all your eggs in one basket because chances are it might fall apart if they don’t know what they are doing. The time wasters/tire kickers are those that act like they are the buyers while trying to market your house to their buyers. Beware of those and ask as many questions as you can to avoid dealing with them.

In the mean time, always remember that, the deal is not tied up yet till you get an EMD. Even if a buyer shows great interest in the property still market to other buyers and first to give you the EMD, gets the price.

If you have any other suggestions or tips be sure to add it in the comments.

P.S: It’s our 5^th wedding anniversary today Wow! How time flies. I have the best life ever and I couldn’t be more grateful to my husband for putting up with me all these 8 years. Can’t wait to enjoy some R&R this weekend away from all of it all…just the two of us